Question

What factors shift the short-run aggregate supply curve? Do any of these factors shift the long-run aggregate supply curve? Why?

Short answer

Price fluctuations, changes in predicted inflation, and persistent output gaps are factors that influence the short-term aggregate supply curve.

Any factor that changes the short-term aggregate supply curve is the short-term aggregate supply curve. Does not shift. The economic direction is temporary and modifies itself.

Step-by-step solution

Step 1. Define aggregate supply.

Aggregate supply, also called as domestic final supply, is the total range of products and services that an economic company intends to sell in a particular period of time.

Step 2. What factors cause the short-run aggregate supply curve to shift? Do any of these factors have an effect on the long-run aggregate supply curve? Why?

Price fluctuations, changes in predicted inflation, and persistent output gaps are factors that influence the short-term aggregate supply curve. Changes in total capital in the economy, changes in available technologies, changes in total labor provided by the economy, and changes in the natural rate of unemployment are all factors that change the long-term aggregate supply curve. Since the short-term direction of the economy is temporary and self-correcting, none of the causes of changing the SRAS curve shift the LRAS curve. Ultimately, this leads the economy to a lasting long-term equilibrium.